Why Amarin Corporation plc (NASDAQ: AMRN) stock is recovering

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Amarin Corporation plc (NASDAQ: AMRN) stock rose 9.93% on November 16th, 2018 (Source: Google finance) after a business update at the Jefferies London Healthcare Conference. Amarin’s stock was up due to this conference presentation. During the presentation, the company’s CEO, John F. Thero, provided additional color on the company’s recent cardiovascular outcomes trial, REDUCE-IT, for its sole commercial-stage product, Vascepa.

AMRN’s share plunged after the company’s presentation at the American Heart Association meeting in Chicago last weekend. After that presentation and an accompanying paper published in the New England Journal of Medicine covering REDUCE-IT’s results, the drugmaker’s shares dropped by as much as 25% in just two days of trading. The big concern was the potential role the study’s mineral oil placebo may have had in skewing the results in Vascepa’s favor. Vascepa has been FDA approved for use in patients with very high triglyceride levels since 2012. However, the FDA balked at approving its use in patients with moderate to high triglyceride levels, choosing instead to wait until results from a long-term cardiovascular outcomes trial were available that could prove that lowering triglyceride levels actually lowers cardiovascular event risk. Amarin’s shareholders have waited years for those results, and when they became available, investors were rewarded for their patience with headline results revealing 4 grams of Vascepa daily reduced the risk of a major cardiovascular event by an additional 25% when used with statins, a class of drugs commonly prescribed to lower bad cholesterol levels. If the FDA approves expanding Vascepa’s eligible patient population, it would be game changing for Amarin’s financials. There are about 3.8 million Americans with triglyceride levels between 500 and 2,000 mg/dl, and only about 2% of those patients are currently being treated. Additionally, there are tens of millions of patients taking statins who also have elevated triglyceride levels and who conceivably could benefit from Vascepa.

Meanwhile, Amarin is moving to gain a label expansion for Vascepa stateside for the REDUCE-IT patient population. However, Thero said that the company is also pursuing an approval in Europe following these unprecedented results. To do so, the company may entertain partnering offers in European territories, per the company’s remarks today. Any partnering deal would likely come with a sizable up-front payment and a favorable royalty rate, lessening the possibility of another capital raise.

While a European deal doesn’t seem imminent, the groundwork has clearly been laid for future partnerships abroad, as well as an expansion of the drug’s label to include a cardioprotective indication inside the United States. As such, Amarin’s stock should continue to push higher in the days and weeks ahead.

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